Italy's film sector braces for a strong summer

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ROME -- This is the year that Italy's cinema industry will react to the election of Silvio Berlusconi and the newfound importance of the summer months at the boxoffice.

Berlusconi, the billionaire media tycoon who has already had two stints as Italian prime minister, was elected to a third term in April. Although he controls film production and distribution giant Medusa, Berlusconi is best known as the founder of Mediaset, the broadcast powerhouse that controls three of Italy's seven national networks.

When Berlusoni campaigned against former Rome mayor Walter Veltroni -- a well-known film fan and the founder of the 3-year-old RomaCinemaFest -- it was seen by some as a battle between the man who made his name with television and the one more closely connected to the big screen.

Now, with Berlusconi in office, many in the industry are wondering about the future of the country's film sector.

"Everyone knew Veltroni was a friend to the industry, but that doesn't mean Berlusconi will prove to be an enemy," says Francesco Melzi d'Eril of art house film producer Mikado. "Berlusconi is a businessman, and making films today is more of a business than ever. We'll have to see, for example, if he will implement the film production tax breaks we have been waiting for for 40 years. If he does, that could have a huge impact."

Javier Noriega, a media sector analyst and the chief economist with investment bankers Hildebrandt and Ferrar, says the health of a sluggish economy will have a big impact on the sector.

"Berlusconi has announced a kind of economic stimulus plan that he insists will help jump-start the Italian economy," Noriega observes. "There's nothing that would help the film industry more than a robust economy, which would mean more money to invest in films and more people lining up to see them."

Another factor involving Berlusconi is Mediaset's transformation from a pure broadcaster to one placing an increasing emphasis on producing content. In 2007, the company made the

previously autonomous Medusa a Mediaset subsidiary, and it acquired control of Dutch reality television producer Endemol. Then, earlier in 2008, Mediaset signed $600 million in exclusive content deals with U.S. film giants Universal and Warner Bros.

Speculation is that some of the new emphasis on content could result in more emphasis on film production for Medusa, the top distributor in Italy last year.

While it may take a few months before Berlusconi's influence on the sector is known, the impact of the summer months will start to become clear sooner than that.

The overall value of the Italian boxoffice and Italian films' percentage of it have increased in each of the last three years. A close inspection of the figures indicates that while performance during most months has remained more or less flat between one year and the next, it has been the improvement in Italian ticket sales in June, July and August that have provided much of the increase.

"I would have a hard time imagining that if the summer months come out ahead of the same months in 2007 that the year as a whole won't be stronger," says Paolo Protti, president of national cinema retailers association ANEC "The summer will tell the tale, not only this year but also going forward."

If the summer months in question go well, another record could be in the works. Last year, Italy broke a modern-day record by selling 103.6 million cinema tickets over the course of the year, the first time more than 100 million tickets were sold in one year since 1986. Over the first quarter of this year, sales were 3% higher than over the same period in 2007.    
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